You are on vacation when a beautiful airplane comes in to the nearest airport that happens to be exactly the aircraft you were searching for. You chat with the owner and it just so happens that he is looking for a buyer. The owner thinks he has a prospect but no commitment yet so he makes this offer: buy it now (close within 2-3days) and it’s yours.
The pre-buy inspection at the area maintenance center indicates it is exactly what you hoped it was—a great value—and a deal is struck. You transfer the money. Now it is time to find a lender who will reimburse the already completed deal.
In general, you should be able to find financing after the fact. Make sure, if you’re going to do that, that you still close through an escrow company. Most lenders would prefer that the seller of the aircraft had some kind of background verification which would happen if closing through escrow. Also, by going through escrow and having a title search done you can verify there’s no unresolved clouds or liens on the title.
A majority of lenders will only allow a reimbursement transaction if the plane originally went through an escrow company. Your options will be severely limited if you don’t go through an escrow company. The most common reason we’ve seen for why buyers do this is they believe, that if they don’t buy it immediately they are going to lose the aircraft to somebody else. Waiting any longer would mean losing the deal.
I understand that concern, and it is legitimate. A better thing to do would be to get pre-approved ahead of time, before you start looking. You’ll feel much better knowing the financing will be there.
Moving too fast can lead to problems later. A proper title search may reveal that the aircraft 10 years ago had severe damage. Or you may hear from the lender that you paid too much for the aircraft. In that case the lender won’t be able to loan as much money as you had hoped.
Let us help you walk the tightrope of speedy deals, if you are faced with that situation, at AOPA Aviation Finance.
Considering aircraft ownership? AOPA Aviation Finance will make your purchase experience as smooth as possible. For information about aircraft financing, please visit the website (www.aopafinance.com) or call 1-800-62-PLANE (75263).